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Fears over 200 Britannia jobs

By MIG: Leek Post and Times  |  Posted: November 06, 2013

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COMMUNITY leaders fear around 200 jobs could be lost from the former Britannia Building Society headquarters in Leek – which in turn has raised concerns that one half of the twin-site premises could be shut.

On Monday the Co-operative Group announced that 70 per cent of the Co-operative Bank – which now owns Britannia – would be taken over by outside investors, including hedge funds.

Up to 50 branches could close, as part of an effort to plug a £1.5 billion black hole.

The Co-op will contribute £462 million under the restructure and will remain the major shareholder with a 30 per cent stake.

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However, the move, which is expected to lead to significant job losses from the bank’s 9,000-strong workforce, has led to fears that many could come from the 1,000 people who work at the former Britannia site in Cheadle Road, Leek.

Leader of Staffordshire Moorlands District Council, Sybil Ralphs, who has been holding close talks with the Co-op, told the Post & Times: “My concern now is that the proposed redundancies could be 20 per cent of the Leek workforce.

“Redundancy is traumatic for staff at any time, but even worse just before Christmas.

“We as an authority are waiting for information from the Co-op regarding the future of the two large sites in Leek.

“My concern now is for the staff. I want to reassure them that any help the district council can give, then please ask us for it.

“Now is the time that we must address the regeneration of the Moorlands and create job opportunities.” 

A Co-op spokesman told the Post & Times that while the company expects to rationalise its branch network by at least 15 per cent by the end of 2014, it was unable to provide any further information on regional impacts at this stage.

The Co-op is to seek a stock market listing in 2014.

However, Staffordshire Moorlands MP Karen Bradley, who has been in talks with senior management, said the bank had a long-term future, but it was clear that there could be job losses.

News of the Co-op’s plans comes amid better news for the Staffordshire Moorlands economy, with Adams Foods last week revealing it is taking on up to 100 extra staff as part of a deal with dairy co-operative First Milk.

Mrs Bradley said: “Following the Co-operative Bank’s new bailout plan, I am relieved to see that the Bank has a long term future for customers and bondholders alike.

“However, we do not yet know how the bailout will affect those that work for the Bank, including the significant number of people still based at the old Britannia HQ in Leek. 

"I have met the Bank’s management regularly over the last few weeks and months, including the chief executive, Euan Sutherland, last week. Prior to the new bailout, management was keen to emphasise their commitment to keeping Leek as a Centre of Excellence for savings and mortgages. I look forward to them delivering on that promise and that while it is clear that there will be job losses, the Moorlands does not suffer disproportionately."

Leek Town mayor, John Fisher, said it was a worrying time for both local people employed at Leek and also for the future of two former Britannia sites at Birchall.

He said: "We have to be optimistic that if one of the premises were sold then another financial institution came in. Leek has a lot going for it and we are right in the middle of the country."

The moves comes after the bank announced a loss for the first year in June of £781 million and admitted that there were deep rooted problems.

The Co-op had previously stated that the bad loans had related mostly to the former Britannia Building Society.

The capital shortfall came to light during Co-op Bank's attempts to buy more than 600 bank branches from the partially state-owned Lloyds Banking Group. A deal was initially agreed in 2012, but fell through earlier this year.

Meanwhile Niall Booker, chief executive of Co-operative Bank, said: "The Bank is now focused on implementing our business plan which, following the capital raise, begins the process of strengthening the Bank, and returning it to profitability over time.

"We remain committed to Co-operative values and ethics. I am delighted that our future shareholders have agreed we can embed our commitment to values and ethics into our constitution. We now have the opportunity to renew our focus on serving the needs of our retail and small business customers.

"We will strive to make things simpler for our customers, removing unnecessary processes and reducing costs. We will also put greater rigour into our risk management and controls, ensuring our customers are dealt with respectfully, fairly and transparently."

Euan Sutherland, chief executive of The Co-operative Group, said: "We have taken a major step forward towards achieving our plan to secure the future of the Bank, putting in place an agreement with a number of our leading investors on a comprehensive Plan that will raise the necessary £1.5 billion of capital.

"The Co-operative Group is making a very significant contribution of £462 million. Key investors have also committed to put in new money and exchange their bonds predominantly for equity in the Bank.

"The Co-operative Group will be the largest single shareholder in the Bank, with a 30 per cent shareholding, and will have significant influence over how the Bank operates."

 

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